European stocks are set to open modestly higher Tuesday although investors are likely to remain cautious as U.S. lawmakers prepare for a key vote on tax reform later this week and members of the Senate Banking Committee meet to confirm the nomination of Jerome Powell as the next head of the Federal Reserve.

A modestly stronger U.S. dollar, which gained around 0.5% in late Monday trading an overnight in Asia, has put some downward pressure on both the euro and the pound, allowing financial bookmakers to improve opening calls for benchmarks around the region at the start of trading. Germany's DAX performance index is slated for a 0.15% gain while Britain's FTSE 100 may add a few points from last night's close.

Banking shares in the U.K., however, are likely to be active after the Bank of England revealed that none of the country's major lenders will need to raise excess capital following a series of Brexit-related stress tests. 

Early indications from U.S. equity futures are also modestly positive, with contracts tied to the Dow Jones Industrial Average rising 15 points from last night's close and those linked to the broader S&P 500 essentially unchanged.

Asia stocks were similarly cautious, with the region-wide MSCI Asia ex-Japan index slipping 0.1% from its 10-year peak and the Nikkei 225 in Japan ending the session just 0.04% to the good at 22,486.24 points. 

China's share market was once again volatile, however, as domestic investors grapple with changes to the government's strategy towards limiting the so-called shadow banking sector and restricting risky lending practices to small and medium-sized businesses. The benchmark CSI index was marked 0.14% higher into the close of trading, but has hoovered around multi-month lows for the past three sessions amid rising government and corporate bond yields and questions over when and how the government will step in next.

Global oil markets continued to soften overnight as investors trim positions into this week's OPEC leaders' summit in Vienna amid consistent reports that the cartel, along with non-members such as Russia, will agree to extend their 1.8 million barrels in production cuts beyond the March deadline and into the end of 2018 in order to address what they have called a supply glut in global markets.

Brent crude futures for January deliver, the global benchmark, were seen 0.21% lower at $63.70 while WTI futures for the same month, which is more tightly linked to U.S. prices, fell 0.65% to $57.75 per barrel.